President Obama told Americans to take a look at investing in the stock market this afternoon, a remarkable utterance for an American president, especially as the Dow Jones Industrial Average proceeds on its course Southward.
"What you’re now seeing is … profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it," the president said on a day that trading continued to hover under 7,000.
The president predicted that Americans’ consumer confidence would improve as they see the stimulus bill "taking root."
"Businesses are starting to see opportunities for investment and potential hiring," he said. "We are going to start creating jobs again."
President Obama made his comments in the Oval Office during a photo opportunity with British Prime Minister Gordon Brown, where the two world leaders took a handful questions from the media.
Asked about the troubles of the stock market, seeming to reflect investor insecurity about the Obama administration’s economic plans, the president said he was "absolutely confident that they will work, and I’m absolutely confident that credit’s going to be flowing again, that businesses are going to start seeing opportunities for investment, they’re going to start hiring again. People are going to be put back to work."
Obama said he wasn’t focused on "the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing." he compared the Dow Jones Industrial Average to a daily tracking poll in politics. "You know, it bobs up and down day to day," he said. "And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong."
But the president also made sure to convey that the problems in the economy were deep-seated. "The banking system has been dealt a heavy blow" due to "lax regulation, massive over-leverage, huge systemic risks taken by unregulated institutions, as well as regulated institutions." These issues are "working their way through the system. And it’s not surprising that the market is hurting as a consequence."
The president said his "main message to the American people is to just recognize that we dug a very deep hole for ourselves. There were a lot of bad decisions that were made. We are cleaning up that mess. It’s going to be sort of full of fits and starts, in terms of getting the mess cleaned up, but it’s going to get cleaned up. And we are going to recovery, and we are going to emerge more prosperous, more unified, and I think more protected from systemic risk having learned these lessons than we were before."
Brown and Obama both said they’d been discussing the ways all the major countries around the world could coordinate stimulus packages as well as, Obama said, "a common set of principles, in terms how we’re approaching banking, so that problems that exist in emerging markets like Hungary or the Ukraine don’t have these enormous ripple effects that wash back onto our shores."
The president also took issue with a New York Times story today about a letter he’d sent to Russian president Dmitri Medvedev.
"I think that the report that was in the New York Times didn’t accurately characterize the letter," the president said, arguing that the Times story "characterized" the letter as "some sort of quid pro quo. It was simply a statement of fact that I’ve made previously, which is, is that the missile defense program, to the extent that it is deployed, is designed to deal with not a Russian threat, but an Iranian threat."
Mr. Obama said it was a "very lengthy letter talking about a whole range of issues, from nuclear proliferation to how are we going to deal with a set of common security concerns along the Afghan border and terrorism. And what I said in the letter is the same thing that I’ve said publicly, which is that the missile defense that we have talked about deploying is directed towards not Russia, but Iran. That has always been the concern, that you had potentially a missile from Iran that threatened either the United States or Europe."
Mr. Obama said the letter stated that "obviously, to the extent that we are lessening Iran’s commitment to nuclear weapons, then that reduces the pressure for the need for a missile defense system. In no way does that … diminish my commitment to making sure that Poland, the Czech Republic, and other NATO members are fully enjoying the partnership, the alliance, and U.S. support with respect to their security.
– Jake Tapper and Sunlen Miller